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"How to Synthesize Algorithms"

Article provided by:Gateway2RussiaGateway2Russia

2 April 2004
"How to Synthesize Algorithms"

7Last year, one of the most conservative and important organizations in science and technology, the Russian Academy of Sciences, founded its own innovation agency, which testified to a significant rally in Russian innovation. The equally sluggish Industry, Science and Technology Ministry held the first federal innovation project competition. Eleven subject areas have been chosen, and the Finance Ministry has allocated $40 million to the endeavor. The Industry, Science and Technology Ministry itself is undergoing structural reform, and a Department of Innovation Development, headed by well-known specialist Boris Simonov, has finally been created within the ministry.

Though the plan to develop the venture industry the ministry came up with more than a year ago has never been approved, setting up venture capital funds has come into fashion in Russia. While not a single fund existed in 2002, three appeared on the Russian market just last year. In June, Alfa Group announced it was setting up a venture fund, Russian Technology, with $20 million in capital, a significant amount for Russia. The Tekhsnabexport Concern, the largest supplier of enriched uranium on the world market with close ties to the Nuclear Power Ministry, created the $10 million Venture Investment Fund on a share basis with the Industry, Science and Technology Ministry.

Western investors also became more active last year. Last May, Intel Capital, the venture division of the major IT manufacturer, opened an office in Moscow. Delegations from numerous investment funds came to Russia. Three forums on promoting Russian high-tech were held in the United States in six months.

Russian big business is trying to work with science and technology directly, bypassing the venture approach. Late last year, the Russian Academy of Sciences and Norilsk Nickel, one of Russias largest producers of nonferrous metals, signed the Program for Research and Development of Hydrogen Fuel Cells, which will last 10 years and cost $40 million. Meanwhile, Yukos opened an industry institute that was the talk of the academic community due to its state-of-the-art equipment and salaries for star scientists comparable to those in the West.

As venture funds appear and corporate R&D increases across a variety of industries from oil to agriculture, finding a national model for managing technological progress becomes an increasingly important issue. There are models of every description out there, ranging from the ultraliberal Anglo-Saxon approach that favors venture funds to the étatist model that favors administration by state and big capital and huge breakthrough projects on a national scale.

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